A U.S. federal decide has issued a short lived restraining order (TRO) towards crypto lender BlockFills in a lawsuit introduced by Dominion Capital, quickly freezing belongings tied to the dispute, based on a submitting seen by CoinDesk.
In a grievance dated February 27, Dominion alleged that BlockFills misappropriated and unlawfully retained hundreds of thousands of {dollars}’ price of buyer crypto belongings, commingled consumer belongings and hid heavy losses.
Dominion claimed BlockFills hid the misuse of buyer funds and refused to return the corporate’s belongings after suspending withdrawals in February. As a part of the grievance, the funding agency sought an asset freeze to guard its crypto trapped on Blockfills’ platform, which was granted by the courtroom.
In an order filed March 3 within the U.S. District Courtroom for the Southern District of New York, federal Choose Mary Kay Vyskocil barred the agency from transferring or disposing of 70.6 bitcoin allegedly belonging to Dominion, or transferring belongings exterior the US whereas the case proceeds.
The courtroom additionally ordered Blockfills, which is backed by buying and selling big Susquehanna, to account for and segregate buyer funds, together with Dominion’s bitcoin, pending a listening to on a attainable preliminary injunction.
CoinDesk reported final month that the crypto lender had incurred losses of round $75 million in the course of the current market downturn, and was on the lookout for a purchaser or emergency funding
BlockFills is a Chicago-based crypto buying and selling and lending agency that gives liquidity, financing and risk-management providers to institutional purchasers. Its platform facilitates crypto lending and borrowing, derivatives buying and selling and over-the-counter (OTC) execution for hedge funds, asset managers, market makers and mining corporations.
A Blockfills spokesperson mentioned as a matter of coverage the agency doesn’t touch upon pending litigation. Dominion Capital declined to remark.
A brief restraining order within the U.S. is an emergency courtroom order that quickly stops somebody from taking a particular motion till the courtroom can maintain a full listening to. It’s generally utilized in authorized disputes involving cash, belongings or monetary exercise to forestall quick hurt.
The TRO was issued with out discover to BlockFills, with the courtroom citing a threat of “quick and irreparable damage,” noting the agency had suspended consumer withdrawals and that insolvency could possibly be imminent.
BlockFills should reply by March 17, when the momentary order is about to run out except prolonged by the courtroom.
Dominion Capital is a New York-based personal funding agency and household workplace that invests throughout personal fairness, structured finance and digital belongings, together with backing bitcoin mining corporations comparable to Bitfarms (BITF).
Powerful occasions
Blockfills mentioned it was halting buyer withdrawals and deposits on Feb. 11 as a consequence of current market and monetary situations.
The agency mentioned on the time that it was working with buyers and purchasers to achieve a swift decision and restore liquidity to the platform. CoinDesk subsequently realized that the crypto lender had incurred losses of round $75 million within the current market downturn and was looking for a purchaser or emergency funding.
CoinDesk additionally reported that Nicholas Hammer, co-founder and CEO of Blockfills, has stepped down from his management position. The agency’s web site now lists Joseph Perry because the interim CEO.
Blockfills mentioned it processed over $60 billion in buying and selling quantity in 2025, a 28% enhance from the prior 12 months, and is among the many extra energetic institutional crypto lending and borrowing desks. It serves about 2,000 institutional purchasers, together with hedge funds, asset managers and mining corporations.
“The corporate is now hurtling in the direction of chapter,” based on insolvency skilled Thomas Braziel, founding father of 117 Companions.
“After one thing like this, no severe establishment is touching the platform,” Braziel mentioned. “They will must file for chapter.”
The New York Legislation Journal first reported information of the Dominion grievance on Monday.
Learn extra: Blockfills co-founder and CEO Nicholas Hammer has stepped down